Lorem ipsum dolor sit amet, consectetur adipiscing elit. Proin laoreet sem id risus dictum eleifend.
In this edition:
Medicare Levy Rate
As part of the 2017/18 Federal Budget, the Government proposed to increase the Medicare levy rate to 2.5% from 1 July 2019. This proposal has now been reversed and the Medicare levy rate will remain at 2%.
Goodwin Chivas & Co Commentary
A nice win by keeping the rate the same as it is today.
Low and Middle Income Tax Offset and Low Income Tax Offset
In addition to the existing low income tax offset, the Government will introduce the low and middle income tax offset which will apply from the 2018/19 financial year to the 2021/22 financial year inclusive. The offset will be applied on a tiered basis as outlined in the table below.
From 1 July 2022, the low income tax offset will increase from $445 to $645. This offset will reduce by 6.5 cents for every dollar over $37,000 up to $41,000 for an offset of $385. From $41,000, the offset reduces at 1.5 cents resulting in no offset applying for incomes in excess of $66,667.
Goodwin Chivas & Co Commentary
The low and middle income tax offset is a temporary measure to provide 'immediate relief'. Once this new tax offset ends however, the implementation of the changes to the low income tax offset and marginal tax rates should provide ongoing relief.
With the additional low and middle income tax offset, the effective income tax-free threshold will be lifted from the current $20,542 to $21,595.
Changes to the Marginal Tax Rates
There are a number of proposed changes to marginal tax rates over the next seven years:
The top marginal rate will also be extended to taxable income exceeding $200,000. The marginal rates would be as per the below table:
Goodwin Chivas & Co Commentary
Overall the combined impact of these changes is to simplify the marginal tax rate system and reduce the amount an individual pays in tax. However, the next seven years will see added complexity for individuals when estimating their tax returns as well as changes to PAYG deductions
Please contact us for advice or assistance relating to these changes.
Suite 401 29-31 Solent Circuit
Norwest Business Park
Baulkham Hills, NSW 2153 Australia
View location map
P:
(02) 9899 3044
F: (02) 9899 1524
Our Team Members are the heart and soul of our business. Our team's guiding principles are integrity, respect, teamwork, achievement and innovation. Our guiding principles are the keys to our culture and to achieving our vision.
We offer a range of free and easy to use
online resources and tools including...